Waiting for Work
NBER Working Paper No. 3385
This paper explains upward job mobility and observed patterns of unemployment by skill as an economy recovers from a recession. Skilled unemployment is due to rational waiting by workers looking for long-term jobs when there is a "lock-in" effect. Lock-in occurs if the conditions in the labor market when a worker first accepts a job have a persistent effect on wages. Using longitudinal data, we provide empirical evidence of the cyclical pattern of wages predicted by the theory and also of lock-in.
Published: George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1990. "Waiting for work," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.